CH: Euro declines for a third day on recovery slowdown worries
LONDON/TOKYO -- The euro fell for a third day against the dollar and the yen on speculation that Europe's recovery from last year's recession is slowing.
The euro weakened to its lowest level in almost nine months against the U.S. currency on concern a European Union plan to assist Greece that leaders detailed in a statement Thursday will fall short in helping the nation tackle its fiscal deficit. A report showed the euro region's economic recovery slowed more than forecast in the fourth quarter last year. The yen rose against higher-yielding currencies after China's central bank said it will raise banks' reserve requirements.
“The statement Thursday bought the euro zone some time but unless something is done soon, downside pressure on the euro will persist,” said Geoffrey Yu, a currency strategist at UBS AG in London.
The euro declined to US$1.3557 as of 10:35 a.m. in London, from US$1.3693 in New York Thursday. It earlier slid to US$1.3537, the lowest level since May 19. The European currency fell to 121.56 yen from 122.90 yen. The Japanese currency was little changed at 89.75 yen per dollar.
The Swiss franc declined against the dollar, prompting speculation that the central bank sold the currency to safeguard the economic recovery.
The franc was 1 percent weaker at 1.0810 against the dollar.
Against Asian currencies, the dollar fell to 1,152.20 South Korean won from 1,156.85 the previous day, while holding steady at 1.4115 Singapore dollars, at 33.16 Thai baht and at 46.28 Philippine pesos. The greenback edged up to 9,360.00 Indonesian rupiah from 9,356.25 and to 32.09 Taiwan dollars from 32.05.
The euro headed for a fifth weekly decline for the first time in more than a year. The region's gross domestic product advanced 0.1 percent in the fourth quarter, compared with a 0.4 percent gain in the previous three months, the European Union's statistics office in Luxembourg said Friday. Economists forecast an expansion of 0.3 percent, the median of 34 estimates in a Bloomberg survey showed.
The common currency has fallen 4.8 percent against the dollar this year on concern nations with the biggest debt burdens will struggle to meet their obligations. Investor attention now turns to a meeting of finance ministers in Brussels on Feb. 15-16.
